Jardee Nominees Pty Ltd and Aged Care Standards and Accreditation Agency
[2004] AATA 460
•11 May 2004
CATCHWORDS – AGED CARE
– extension of time to lodge application to Tribunal – whether scheme of Aged Care Act militates against extension – whether interests of respondent or of any other person affected by extension – whether applicant had made a conscious business decision not to seek review – relevance of amended Site Audit Report – merits of application – extension of time granted.
Administrative Appeals Tribunal Act 1975 s. 29
Aged Care Act 1977 ss. 3-1, 32-3 32-4, 33-1, 34-2, 42-1, 42-4, 42-5, 53-1, 54-1, 54-2, 67-4, 67-2, 80-1 and 96-1
Accreditation Grant Principles 1999 ss. 2.26, 2.27, 2.28, 2.29, 2.32, 2.34, 2.38, 2.39, 7.1, 7.2, 9.1 and 9.4
Residential Care Subsidy Principles 1997
Quality of Care Principles 1997
Extra Service Principles 1997
Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 58 ALR 305
Comcare v A’Hearn (1993) 45 FCR 441
Secretary, Department of Social Security v Van Den Boogaart (1995) 37 ALD 619
Dickinson v Comcare (1998) 52 ALD 86
Maynard v Secretary, Department of Social Security [1993] FCA 698
Bouvet v Secretary, Department of Social Security [1992] FCA 216
Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121
Zizza v Federal Commissioner of Taxation (1998) 55 ALD 451
Windshuttle v Deputy Commissioner of Taxation (1993) 46 FCR 235
Saitta v Commonwealth [2001] FCA 817
DECISION AND REASONS FOR DECISION [2004] AATA 460
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2003/1065
GENERAL ADMINISTRATIVE DIVISION )
Re JARDEE NOMINEES PTY LTD
Applicant
AndAGED CARE STANDARDS AND ACCREDITATION AGENCY
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 11 May, 2004
Place: Melbourne
Decision:The Tribunal extends the time within which the applicant may lodge an application to review the reviewable decision of the respondent dated 25 February, 2003 to and including 24 September, 2003.
S A FORGIE
Deputy President
REASONS FOR DECISION
On 24 September, 2003, the applicant, Jardee Nominees Pty Ltd (“Jardee”), applied under s. 29(7) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) for an extension of the time permitted for review of a reviewable decision made by the Aged Care Standards and Accreditation Agency (“Agency”). That decision had been made on 25 February, 2003 and was a decision not to vary its earlier decision that the Regent Aged Care Facility (“Regent”) was accredited for a two year period until 17 March, 2005.
At the hearing, Ms Mortimer of counsel appeared on behalf of Jardee and Mr Niall of counsel appeared on behalf of the Agency. Regard was had to affidavits of Ms Lynette Gilbert, who is a Director of Jardee, sworn on 24 September, 1993 and 24 October, 2003. The later affidavit had earlier been filed in proceedings in the Federal Court. No oral evidence was given.
THE ISSUE
The issue in this case is whether the time within which Jardee may lodge an application should be extended until 24 September, 2003.
THE SCHEME OF THE ACT
In general terms, the Aged Care Act 1977 (“the Act”) provides for the Commonwealth to give financial support through the payment of subsidies for the provision of aged care and through the provision of grants for other matters connected with the provision of aged care (s. 3-1). “Aged care” means either residential care, community care or flexible care or any combination of them (Schedule 1, clause 1). Subsidies are paid under Chapter 3 but both Chapters 2 and 4 are relevant in determining their payment. Residential grants are paid under Chapter 5 and residential care subsidies are payable under Part 3.1 of the Act. Subject to certain exceptions that are not relevant in this case, s. 42-1 provides that an approved provider is eligible for residential care subsidy in respect of a day if the Secretary is satisfied that, during that day, the approved holder holds an allocation of places, provides residential care to a care recipient in respect of whom an approval is in force under Part 2.3 as a recipient of residential care and the residential care service through which care is provided meets its accreditation requirement, if any, applying at that time (s. 42-1).
An “accreditation requirement” is a requirement set out in s. 42-4 (Schedule 1, clause 1). In the case of a residential care service, the service meets its accreditation requirement at all times during which there is in force an accreditation for the service by an accreditation body or there is in force a determination under s. 42-5 that the service is taken to meet its accreditation requirement (s. 42-4(1)).
The accreditation process
For the purposes of this case and since 1 January, 2001, a residential care service meets its accreditation requirement at all times during which there is in force “… an accreditation of the service by an accreditation body” (s. 42-4(1)(a)). In general terms, s. 42-4(5) provides that the Residential Care Subsidy Principles 1997 may specify the day after which all residential care services must comply with standards or other principles set out in those Standards.
An “accreditation body” is a body to which an accreditation grant is payable. Such a grant is payable under Part 5.4. The Secretary of the Department may enter a written agreement with a body corporate under which the Commonwealth makes one or more grants of money to the body for the purposes of, among others, the accreditation of residential care services in accordance with the Accreditation Grant Principles 1999 (s. 80-1(a)). It has done so with the Agency. The Accreditation Grant Principles may deal with a number of matters including the procedures to be followed in deciding whether to accredit a residential care service, including the reconsideration of decisions on accreditation and the matters to be taken into account on revoking or suspending accreditation (s. 80-1(2)).
Division 3 of Part 2 of the Accreditation Grant Principles, which have been made under s. 96-1 of the Act, applies to the accreditation decision made in relation to applications for accreditation made by persons other than first time applicants (s. 2.26). Within 28 days after receiving a site audit report, the accreditation body must decide either to accredit or not to accredit the service (s. 2.27(1)) unless the two bodies have agreed to extend that time (s. 2.27(2)).
If the accreditation body decides to accredit a residential care service, it must decide the period for which the service is to be accredited, whether there are any matters in respect of which improvements must be made to improve its compliance with the Accreditation Standards and the form and frequency of support contacts for that service (s. 2.28(1)). Within 14 days of making an accreditation decision, the accreditation body must advise the applicant of it in writing (s. 2.29(1)). The accreditation body must also advise the applicant of matters such as the period for which the service is to be accredited (s. 2.29(2)(a)).
Within seven days of being told about a decision to accredit a residential care service, the applicant may give the accreditation body a written request to reconsider the period for which the service is to be accredited i.e. the period mentioned in s. 2.29(2)(a) (s. 2.32(1)). Within 56 days of receiving the request (s. 2.38(2)), the accreditation body must decide whether or not to vary the period and, within 14 days of making that decision, advise the applicant of its decision in writing (s. 2.39(1)). A decision made under s. 2.32 to vary the period for which residential care service is to be accredited is a “reviewable decision” (s. 7.1, Item 2) and so reviewable by the Tribunal (s. 7.2). Neither the Act nor the Accreditation Grant Principles specify the time within which an application may be made to the Tribunal.
Unless the accreditation body has received a request to review a decision made under s. 2.27(1) or 2.38(1) or an application has been made to the Tribunal, it must publish the decision, an executive summary of any assessment team’s report in relation to the decision and any improvement outline given to the accreditation body under s. 2.34(2)(b) (s. 9.1(1) and (2)). The publication must take place within 28 days of the end of the period in which a request for reconsideration or review could be made (s. 9.1(4)). The accreditation body must make full copies of an assessment team’s full report, a decision made by an accreditation body and an improvement outline available on request (s. 9.4).
Responsibilities of approved providers - the Accreditation Standards
Chapter 4 of the Act is headed “Responsibilities of approved providers”. Approved providers, s. 53-1 provides, “… have responsibilities in relation to aged care they provide through their aged care services.” The section then provides that those responsibilities relate to:
“·the quality of care they provide (see Part 4.1);
·user rights for the people to whom care is provided (see Part 4.2);
·accountability for the care that is provided … (see Part 4.3).”
In so far as quality of care is concerned, the responsibilities of an approved provider are set out in Part 4.1 of the Act. Section 54-1 sets out the responsibilities and they are expanded upon in the remaining sections in the Part. Among the responsibilities of a residential care service after the accreditation day is the responsibility to comply with the Accreditation Standards made under s. 54-2 (s. 54-1(d)). The “accreditation day” is 1 January, 2001 (Schedule 1, clause 1, 42‑4(2) and Residential Care Subsidy Principles).
The Accreditation Standards are “… standards for quality of care and quality of life for the provision of residential care on and after the accreditation day” (s. 54-2). The four standards comprising the Accreditation Standards are set out in Schedule 2 to the Quality of Care Principles 1997 and comprise Management Systems, Staffing and Organisational Development, Health and Personal Care, Residential Lifestyle and Physical Environment and Safe Systems. Within each Accreditation Standard is a paragraph describing the principle behind the standard and another setting out the intention of the standard. There is then set out the Matter Indicator and the Expected Outcome. The two items that are in issue in this case are items 2.10, under the Standard of Health and Personal Care, and 4.4, under the standard of Physical Environment and Safe Systems. The principle behind each standard and the Matter Indicator and Expected Outcome for each are:
Part 2: Health and Personal Care
“Residents’ physical and mental health will be promoted and achieved at the optimum level in partnership between each resident (or his or her representative) and the health care team.”
Matter Indicator: “Nutrition and hydration”
Expected outcome: “Residents receive adequate nourishment and hydration”
Part 4: Physical Environment and Safe Systems
“Residents live in a safe and comfortable environment that ensures the quality of life and welfare of residents, staff and visitors.”
Matter Indicator: “Living environment”
Expected outcome:“Management of the residential care service is actively working to provide a safe and comfortable environment consistent with residents’ care needs.”
Extra service places
Section 32-3 provides that a person may make an application for extra service status in respect of a residential care service or a distinct part of a residential care service. He or she may only do so if he or she has an allocation under Part 2.2 for the places included in the residential care service or has applied for those places. The application must be in response to the Secretary’s invitation to apply for extra service status. Section 32-4 provides the criteria against which the Secretary must consider the application. The Extra Service Principles1997 made under s. 96-1 of the Act may specify the matters to which he or she must have regard in considering those criteria. In so far as it is relevant, s. 32-4(1)(c) provides that:
“The Secretary must not grant an application unless the following criteria are satisfied:
(c)if the applicant has been a provider of aged care – the applicant has a very good record of:
(i)conduct as such a provider; and
(ii)compliance with its responsibilities as such a provider, and meeting its obligations arising from the receipt of any payments from the Commonwealth for providing aged care;”
Extra service status ceases to have effect at a particular time if any one of a number of events occurs. The relevant events in this case are that:
“the residential care service does not meet its accreditation requirement (if any) at that time” (s. 33-1(d)).
BACKGROUND
For the purposes only of deciding whether or not to extend the time in this case, I set out the background leading to the application’s being made. In doing so, I rely on the affidavits of Ms Gilbert and the reports and correspondence annexed to her earlier affidavit.
Jardee operates the Regent. Since August, 1996, Regent has had Extra Service status and that status applies to each of Regent’s 46 places. In March, 2000, the Agency granted Regent accreditation in accordance with Part 2, Division 3, Subdivision 4 of the Accreditation Grant Principles. That accreditation was given until 17 March, 2003. Jardee sought re-accreditation of the Regent for a further three years and, in December, 2002, the Agency conducted a site audit of the Regent as part of the processes leading to re-accreditation.
From 17 to 19 December, 2002, the Agency conducted a site audit at the Regent. In late December, 2002, it sent Jardee a Statement of Major Findings of the Site Audit. A little later, the Agency sent a further document dated 2 January, 2003 to Jardee. It was entitled “Site Audit Report and Recommendation to Accredit” (“Site Audit Report”) and had been prepared by one of the Agency’s assessment teams. That team recommended that the Regent be accredited for a period of two years and six months. With regard to support contacts, it recommended that there be two support contacts during the period of accreditation and that at least one be a site visit.
As part of its Site Audit Report, the assessment team reported that the Regent was not compliant with respect to two of the Expected Outcomes under the Accreditation Standards. The first was Expected Outcome 2.10, which requires that “… residents receive adequate nourishment and hydration”. The second was Expected Outcome 4.4, which requires that “Management of the residential care service is actively working to provide a safe and comfortable environment consistent with residents’ care needs”.
On 14 January, 2003, Ms Gilbert sent the Agency a letter dated 8 January, 2003 and setting out her response to the findings in the Site Audit Report that Regent had been non-compliant in two respects. In her letter, she stated that the rating of non-compliance had been based on a number of incorrect findings in the report. She provided detailed further information and also questioned the approach adopted by the Agency in preparing its report when she wrote:
For us to be able to prove that we comply with the expected outcomes it is necessary for assessors to analyze and verify the way in which we meet the outcomes. This can only be achieved through conducting an audit trail that starts with our policies, procedures and forms then comparing with staff practices, standards and laws. This process was not undertaken at the site visit.
According to the Accreditation Guide for Residential Aged Care Services issue 2 December 2001, section C4 states ‘As the team has already discussed the major issues identified during the audit there should be no ‘surprises’ at the exit meeting’. We were not informed of the possible non-compliance for standard 3.10 until the exit meeting.
This audit has left us feeling as if the objective from the beginning of the audit was ‘fault finding’ rather than an opportunity to present and demonstrate the way in which we meet the expected outcomes. The Statement of Major Findings Site Audit Report is incomplete. There are six entries in the report stating ‘further evidence will be supplied’. It is not possible for us to respond without this evidence.” (Annexure LG2 to the affidavit of Ms Gilbert sworn on 24 September, 2003).
On 29 January, 2003, the Agency decided to accredit Regent for a period of two years. That decision was made after taking into account Ms Gilbert’s letter of 8 January, 2003 as well as earlier site audit reports including that dated 2 January, 2003. It was set out in a document entitled Reason for Decision to Accredit (Annexure LG3 to the affidavit of Ms Gilbert sworn on 24 September, 2003).
Regent sought reconsideration of that decision in a letter dated 11 February, 2003. In its letter, Ms Gilbert’s earlier concerns with procedures were raised once more together with concerns about the findings leading to the decision. The letter reads, in part:
“As you are aware from our previous submission (forwarded to the Agency 14th Jan 2002), the initial Summary of Major Findings contained significant incorrect and unsubstantiated information. The correct information was forwarded to your Agency in our Submission, however the second version of the Summary of Major Findings contained the original inaccuracies plus changes to the intent of the original document which then formed the basis of the “Reason for decision to accredit” and then this information was included in the final Site Audit Report.
We were concerned that on receipt of our initial Submission we were not contacted to discuss correcting the erroneous information in the initial Summary of Major Findings, thereby enabling the Agency decision makers to base their “Reason for decision to accredit” on accurate data.” (Annexure LG4 to the affidavit of Ms Gilbert sworn on 24 September, 2003).
Regent also advised the Agency that it had contacted Future Choices Management Services to verify the information contained in its submission dated 14 January, 2002 and enclosed a copy of that report.
Regent also addressed other aspects of concern to it arising from the procedure that had been adopted at the site audit visits in December, 2002:
“The intent of our initial submission was to enable the correct information to be submitted regarding the Statement of Major Findings. Whilst we have mentioned other aspects of concern, we also wish to bring to you [sic] attention further issues relating to the conduct of the Quality Assessors to [sic] (refer our initial Submission regarding to manner in which audit questions were framed).
The Quality Assessors did not conduct the Site Audit within the stated hours and indeed were on the premises for 6 hours the first day and less than 5 hours the second day, and less than 3.5 hours the third day. As a result staff were not given the opportunity to present their practices, nor did the Assessors take the opportunity to verify their alleged findings even though management and staff specifically requested time to do so.
The Accreditation Grant Principles and Accountability Principles require that the audit process be conducted within specific timeframes and with due process, this was not adhered to.
We understand that there are different types of sampling processes utilized in the Agency’s audit methods, our management and staff were not were not [sic] given the opportunity to discuss our practices for issues raised as non compliance by the Assessors, for example no staff were interviewed regarding their knowledge of the facilities’ restraint policies and practices.
As a result of a comprehensive review of all Agency Reports, it is our conclusion that owing to the incorrect nature and intent of the findings, these documents cannot form the basis of the conclusions reached in the Site Audit report and therefore the subsequent Accreditation term and recommendation for sanctions to be imposed. (Refer attachment 1. Regent Management Response/Report)
Our program for resident restraint has ensured residents are safe and we have identified areas for improvement but do not rate as non compliant with the expected outcome.
Similarly our systems to ensure residents receive adequate nutrition and hydration have ensured there is no risk to residents’ health and safety. We have identified areas for improvement there is no accurate record of non compliance with the expected outcome.” (Annexure LG4 to the affidavit of Ms Gilbert sworn on 24 September, 2003).
On 25 February, 2003, the Agency reconsidered its earlier decision and decided not to vary the period of accreditation. Regent was, therefore, accredited for the period until 17 March, 2005. It set out its reasons in a document which it sent to the Regent under cover of a letter dated 26 February, 2003. That letter advised Regent of its right to seek review of the decision and Ms Gilbert acknowledges that she knew that it had 28 days within which to do so.
At or about the time that Regent was notified of the Agency’s decision, Jardee was negotiating with Residential Aged Service Pty Ltd (“RAS”) for the sale both of itself and Regent. Ms Gilbert conducted the negotiations on behalf of Jardee. As she thought that the Agency’s decision might have a material effect on the manner in which RAS viewed the sale, she advised one of its directors, Mr Stephen Knapp, of it. Mr Knapp told her that RAS was not concerned that Regent’s accreditation was only for a two year period. He also advised her that he did not want Jardee to raise the issue with either the Agency or the Department of Health and Ageing (“Department”) as RAS did not want its future relationship with them undermined by a dispute over Regent’s accreditation.
In view of what Mr Knapp told her, Ms Gilbert felt that a review by the Tribunal might interfere with, or prejudice, the sale negotiations with RAS. She understood that Mr Knapp did not want RAS to become the approved provider operating Regent while there was a Tribunal review on foot. In addition, Ms Gilbert felt that the expenditure of legal costs in seeking the review would be an unnecessary expense. Consequently, Ms Gilbert decided that she would not lodge an application in the Tribunal to review the Agency’s decision.
On 5 March, 2003, a delegate of the Secretary of the Department sent Jardee, as the approved provider, a Notice of Non-Compliance under s. 67-2 of the Act. The delegate did so on the basis that she was satisfied that Jardee was not complying with one or more of its responsibilities under Parts 4.1, 4.2 or 4.3 of the Act in respect of Regent. In making her decision, the delegate noted that she had considered the Site Audit Report submitted on 2 January, 2003, the Agency’s decision and Reason for Decision to Accredit dated 29 January, 2003 and the Agency’s letter dated 30 January, 2003 to the Department recommending that sanctions be imposed. She invited Jardee to make submissions within 14 days. In addition, she particularised the responsibilities as those under s. 54-1(1)(d) to comply with the Accreditation Standards made under s. 54-2.
The delegate of the Secretary decided to issue a Notice to Remedy Non-Compliance to Jardee under s. 67-4 of the Act. That notice was dated 24 March, 2003. In a later letter dated 22 August, 2003, the delegate noted that there had been an Agency Support Contact redated 27 March, 2003. In response to that notice, Jardee had given a written undertaking to remedy non-compliance and that had been received by the Department on 3 April, 2003. The actions to remedy non-compliance were to be completed by 2 May, 2003.
The negotiations between Ms Gilbert and Mr Knapp continued throughout the first quarter of 2003. They were still continuing on 16 April, 2003 when Jardee applied for approval of Regent’s Extra Service Status.
On 10 July, 2003, Jardee’s solicitors wrote to the Department referring to Jardee’s application to have Regent’s extra service status renewed pursuant to s. 34-2 of the Act. The solicitors referred to Jardee’s having entered a contract for the sale of its shares. Completion of that sale was subject to the Department’s decision to renew the Regent’s extra service status and Jardee’s commercial interests would be significantly affected by the Department’s decision. Jardee, the solicitors continued, was particularly concerned that the Agency’s decision to accredit the Regent for two years would have an adverse impact upon the Department’s decision in relation to the Regent’s extra service status. They then set out a number of submissions and particularly highlighted “… the deficiencies that are present in the Agency’s decision making processes with respect to the accreditation of the Facility” (Annexure LG8 to the affidavit of Ms Gilbert sworn on 24 September, 2003).
Among the matters to which the solicitors referred was a site audit report published on the Agency’s website in relation to Regent. Of it, they said that it:
“… contained several material omissions and changes to the Site Audit Report that accompanied the Agency’s original decision to accredit the Facility for a period of 2 years. These changes and omissions have been separately identified by out client in a tabular format and have been enclosed with the materials accompanying this letter.
Furthermore, the Agency’s decision to accredit the Facility for a period of 2 years was based on a document, the Site Audit Report, that is no longer in existence. The Final Report was prepared and published after the Agency’s decision to accredit the Facility for a period of 2 years was made and yet it is reported to be the document upon which the Agency’s original decision was based.
A number of the factual errors and inaccurate statements that our client referred to in its earlier submission to the Agency appear to have been acknowledged and addressed by the Agency in its Final Report such that the Final Report provides a more accurate but still unreliable record of the audit conducted. We therefore submit on behalf of our client that if the Final Report had been relied upon by the Agency in its accreditation decision, it would not have been able to justify its decision to accredit the Facility for a period of only two years.” (Annexure LG8 to the affidavit of Ms Gilbert sworn on 24 September, 2003, paragraph 6).
An attachment set out the changes that had been noted between the Site Audit Report as it was received in January, 2003 and that published on the Agency’s website. It set out the significance that Jardee saw in the changes and the submissions that it made regarding them.
The solicitors also advised the Department that the Agency’s website stated that, as at 25 February, 2003, Regent was not compliant with standards 2.10 and 4.4. Their client instructed them that there had been a telephone audit on 27 March, 2003 in which the Agency had not raised any concerns regarding non-compliance with Regent’s continuous improvement plan. In addition, the Agency had not visited Regent to review its ongoing compliance with the standards. A follow up review was not scheduled until December, 2003. (Annexure LG8 to the affidavit of Ms Gilbert sworn on 24 September, 2003, paragraph 7).
The Agency conducted a site visit to the Regent on 18 August, 2003. On 22 August, 2003, a delegate of the Secretary wrote to Jardee regarding the Notice of Non-Compliance issued earlier on 5 March, 2003. He stated that he was satisfied that the Undertaking to Remedy Non-Compliance received by the Department on 3 April, 2003 had been complied with and therefore that compliance action on the matter had been finalised. Notice of Non-Compliance and Notice to Remedy Non-Compliance would be maintained as a record of Jardee’s compliance with its responsibilities under the Act.
On 28 August, 2003, the Department wrote to Jardee advising it that its application for extra service status had not been granted. The delegate’s reason was that “… the provider did not satisfy the criterion under the Act which states that the applicant must have, ‘a very good record of: conduct as a provider and compliance with its responsibilities as such a provider, and meeting its obligations arising from the receipt of any payments from the Commonwealth for providing aged care’ in the three years immediately preceding the application for renewal under section 32‑4(1)(c) of the Aged Care Act 1997 (the Act) and as further specified under section 14(19) of the Extra Service Principles 1997 (the Principles).” (Annexure LG10 to the affidavit of Ms Gilbert sworn on 24 September, 2003, page 1).
On either 28 or 29 August, 2003, Ms Gilbert told Mr Knapp that the application had been refused. He immediately advised her that, if that were the case, RAS would not be interested in purchasing Regent from Jardee on the terms previously negotiated.
POWER TO EXTEND TIME
Pursuant to s. 29(2) of the AAT Act and unless varied by another enactment, a person has 28 days within which to apply for review of a decision. There was no variation of the time period effected by the Act. A person may apply for an extension of the time allowed to lodge an application pursuant to s. 29(7) of the AAT Act and may do so even though the time for an application has expired (s. 29(8)).
In considering applications to extend time in various jurisdictions in the Tribunal, regard has been had to the principles set out by Wilcox J in Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 58 ALR 305. Without intending to set out an exhaustive list, his Honour set out a number of principles to guide a court in reaching a decision on an application for an extension of time. The essential features of those principles are set out in the head note to the case which reads:
“(a) the fact that the applicant bears the onus of rebutting the prima facie rule that no ... proceedings commenced outside the prescribed period will be entertained by the court by showing an ‘acceptable explanation of the delay’ and that it would be ‘fair and equitable in the circumstances’ to extend the time;
(b)any action taken by the applicant, apart from the actual making of an application for review under the ADJR Act, which continues to make the decision-maker aware that the finality of his decision is being contested;
(c)any prejudice to the respondent which may have resulted from the delay;
(d)any unsettling of people, other than the respondent, or of established practices;
(e)the merits of the substantial ... application;
(f)considerations of fairness as between applicants and other persons in like positions: it is not only prejudice vis-a-vis the parties but against the wider public interest which must also be taken into consideration.”
These principles have been developed in later cases such as Comcare v A’Hearn (1993) 45 FCR 441 (Black CJ, Gray and Burchett JJ), Secretary, Department of Social Security v Van Den Boogaart (1995) 37 ALD 619 (Kiefel J) and Dickinson v Comcare (1998) 52 ALD 86 (Finn J). In Comcare v A’Hearn, for example, the Full Court of the Federal Court said that, although it will normally be expected that the applicant will give an explanation for his or her delay in lodging an application, such an explanation is not an essential pre-condition to the Tribunal’s exercising its discretion (page 444). At the same time, it is clear that the fact that the lack of a satisfactory explanation for the delay (even if it appears credible) may, in some circumstances, strongly weigh against the grant of an extension of time (Security, Department of Social Security v Van Den Boogaart at page 621).
In Maynard v Secretary, Department of Social Security [1993] FCA 698 (unreported, 26 August, 1993) Northrop J pointed out:
“An unfettered discretion conferred by statute cannot be fettered by decisions of a court. In exercising the power conferred by s 11 of the Judicial Review Act, the Court must act judicially and on relevant facts. If it is wrong, an appeal court can put the trial judge right. The reference to other authorities may be interesting but essentially they are illustrations of other cases, in most cases the facts of which are completely different to the facts before the Court. They may be helpful in understanding what may be relevant. They are not binding in any sense at all and to that extent it is often unwise to refer to too many cases because it detracts from the real issue that the Court must decide on the facts before it.
What is necessary to keep in mind is that the statute does impose a limitation period but at the same time there is a power to extend that period. The extension can be made before or after the expiration of the time. Having regard to that clear intention of the Legislature, the Court must consider the facts and determine whether there has been proof of sufficient matters to justify the granting of the indulgence to the person seeking the extension of time. Involved in this, a number of matters must be considered, including any explanation as to why the matter was not brought within the prescribed time, the effect on the applicant if the time is not extended and the effect on other persons, including the respondent or third parties who could be affected if leave is granted and the application succeeds in due course. Often some of these features are referred to as what is fair and reasonable, sometimes referred to as prejudice, but essentially what is to be considered is the effect of either making or refusing to make an order for the extension of time.” (pages 3-4)
It is also clear from the authorities, however, that the time within which an application may be lodged will not be extended if there is no possible hope of the application’s succeeding if it were to be reviewed on the merits (Bouvet v Secretary, Department of Social Security [1992] FCA 216 (Unreported, Northrop J, 7 April, 1992). This aspect was also considered by von Doussa J in Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121 when he said:
“One of the principal considerations to be addressed in deciding whether it
is fair and equitable in all the circumstances to extend time is whether the
merits of the proposed appeal are such that if an extension of time is granted
there is some prospect of success in the appeal. If a consideration of the
merits indicates that there is no question to be agitated on the appeal, and
there is no prospect of success, it would be futile to grant an extension of
time and most unjust to the respondent to subject the respondent to the costsof defending a pointless appeal. …” (page 122)
Although noted by von Doussa J as “one of the principal considerations to be addressed” (emphasis added), it is even clearer from the judgement of Katz J in Zizza v Federal Commissioner of Taxation (1998) 55 ALD 451 at 460-461 that the merits of the substantive application are not to be ranked ahead of other considerations.
Katz J considered Wilcox J’s reference to “any prejudice to the respondent which may have resulted from the delay” in Windshuttle v Deputy Commissioner of Taxation (1993) 46 FCR 235. His Honour first quoted a passage from Wilcox J’s judgment:
“ The kind of prejudice which is relevant [in extension of time applications] is prejudice that could arise to the opposing party in properly and fairly dealing with the subject matter of the dispute that will require determination if the extension of time is granted. Relevant matters will be whether witnesses have disappeared or their recollections have faded (provided of course that the evidence of the witnesses would have been material: Ulowski v Miller [1968] SASR 277 at 283-4 and cannot be refreshed: Wedesweiller v Cole (1983) 5 ALN N137; 47 ALR 528; 71 FLR 256 at 261); whether avenues of useful inquiry have dried up or become difficult to pursue; and whether material documents have been destroyed. In a case like the present it may be open to the party potentially entitled to recover money to establish that by reason of the delay, the financial resources of the applicant have so altered for the worse that the chance of recovery of whatever sum is ultimately found to be due has seriously diminished. But as Bray CJ observed in Ulowski v Miller above, at 284 and also in Victa Ltd v Johnson (1975) 10 SASR 496 at 504, a court (or tribunal) should be slow to infer something to the existence of which the party asserting it is unwilling to depose. So, if a party against whom an extension of time is sought, intends to oppose that extension on the ground of prejudice, that party should adduce evidence which shows the nature and extent of that prejudice. In the present case no cause for prejudice beyond those matters listed above was asserted or deposed to.
…
… Furthermore, as the AAT found that there was no satisfactory explanation for that delay, and brought that lack of explanation into the balance as a factor against the applicant in the exercise of the discretion, there would have been a serious risk of `double counting' the dilatory behaviour of the applicant if prejudice to the commissioner had been inferred simply from the fact of the delay, and from the failure to bring to the commissioner's attention the fact that the applicant disputed the basis for the assessment prior to December 1991.” (page 457)
THE SUBMISSIONS
When the negotiations with RAS stalled, Ms Mortimer submitted, Jardee realised that it would have to operate Regent for the foreseeable future and that other potential purchasers might be similarly affected by the accreditation period. Given the system established under the Act, there are two entities that are involved in the regulation of the provision of aged care: the Agency and the Department. Even recognising that the Act may prevent certain information passing between the two bodies, there can be no question in this case that the Department knew that the factual basis of the Agency’s findings was hotly contested by Jardee. Despite that, the Department picked up the Agency’s findings. It cannot be said that Jardee ever accepted the decision. There has subsequently been some shifting of the Agency’s view of the factual basis but that shift occurred too late to be taken into account in its making the accreditation decision.
There is no evidence of any prejudice to the Agency, Ms Mortimer submitted and there is nothing to demonstrate that the scheme of the Act would be unsettled if Jardee were to be granted an extension of time. Considerations of fairness do not require the application for extension of time to be refused. The period for which Regent is accredited does not impinge upon others. There is no wider public interest weighing against the extension. Sanctions have not been imposed against Regent and the compliance action against it had been finalised. The Agency’s supervision between February, 2003 and the date of the hearing had amounted to one telephone call to Regent. That showed that the Agency had no concerns about Regent and its continuing compliance with the standards.
Relying on the judgement of Gray J in Saitta v Commonwealth [2001] FCA 817 at [36], Mr Niall submitted that the process of the accreditation and regulation of aged care facilities is intended to advance the interests of the residents of the residential care service and not the commercial interests of the provider of those services. The system of accreditation is not intended to be a means by which providers or purchasers can stand to gain money. For all that, accreditation affects both the provider and the residents and so it is important that the status of the provider is determined quickly. A resident needs to know where he or she stands. This is reflected in the strict time limits on the decision-making process set out in the Accreditation Grant Principles. The requirement that the Agency publish its decision and other material pursuant to s. 9.1 of the Accreditation Grant Principles is a strong indication that there is a need for certainty and finality.
In relation to Jardee’s circumstances, Mr Niall submitted that it had made a conscious, deliberate and informed decision that it was in its best interests not to challenge the Agency’s decision. The pursuit of self-interest is not an adequate explanation. The fact that the proposed sale of its business has not eventuated is not a reason to extend the time. Furthermore, there is no explanation for the delay between the time at which it was clear that the sale would not proceed and the time at which the application was made. Jardee did nothing to challenge the decision at any time between the notification of the reviewable decision and the lodgement of the application. Mr Niall questioned whether Jardee had hotly contested the factual basis of the Agency’s decisions and, if so, when it started to do so. It is clear that the refusal of Jardee’s application for continuation of its extra service status was of some significance.
Mr Niall submitted that he could not point to any particular prejudice to the Agency but the fact that the Department relied on the Site Audit Report tells against granting the extension of time to review the Agency’s decision. The Agency’s decision in finding that Regent was non-compliant in two aspects might well have had consequences in that the Department issued non-compliance letters raising the possibility of the imposition of sanctions. The fact that a system is such that third parties will act on the decisions of the Agency strongly militates against an extension of time’s being granted. A delay of 183 days upsets the statutory order that has been established.
When considering prejudice, Mr Niall submitted, regard should be had to the fact that there is no statutory mandate that a residential care service will be accredited for a period of three years. Regent may apply once more for a renewal of its accreditation. The matter is now of historical interest and there is no suggestion of ongoing non-compliance. Continuing accreditation depends upon Regent’s meeting the standards in the future.
CONSIDERATION
There can be no question that, as Gray J said in Saitta v Commonwealth:
“It is plain that the Aged Care Act is directed to the benefit of those receiving and requiring care. The use of private businesses to provide care is incidental to the purpose of the legislation and subordinate to it. …”(paragraph 36)
Equally, there can be no question that the Act establishes a scheme that envisages an orderly progression from applications for various accreditations or approvals being made through assessments of those applications both by reference to written material and the reports resulting from site visits and then to decisions’ being made. Provision is made for the decisions to be published together with some related material. Time limits are established and are relatively short. The scheme ensures that residents and their family and friends as well as those engaged in providing care for them know where they stand but the scheme does not necessarily militate against its time limits ever being extended. Indeed, it cannot for the operation of s. 29(7) of the AAT Act has not been modified by the Act. Clearly, it is contemplated by Parliament that there may be circumstances in which it is appropriate to extend the time within which an application for review may be lodged.
In this case, considerations of Regent’s residents knowing where they stand does not assume as much importance as it might in another case. They know where they stand: Regent has been accredited until 17 March, 2005 and it has been refused its extra service status. This is not a case in which accreditation has been cancelled or extended for such a relatively short period that residents could be said to be unsettled by having the accreditation decision reviewed. Of course, it is feasible that, on review, the decision could be varied so that the period of accreditation were shortened so that it expired on some date before 17 March, 2005. That was not raised by the Agency as a position for which it would be pressing and I think that, on the information that I have been given, the possibility of its occurring should be taken as unnecessarily unsettling the residents.
The Agency could not said to be unsettled if Jardee is permitted to lodge an application for review of its decision although its usual method of processing applications for accreditation will be varied. It was on notice from the beginning that Jardee was unhappy, and continues to be unhappy, with the factual basis of its decision and to dispute its accuracy. Indeed, the Agency knew that well before it made its decision for Ms Gilbert sent it a letter on 8 January, 2003 setting a detailed response to the findings set out in the Site Audit Report that provided that factual basis. Again on 11 February, 2003 Ms Gilbert reminded the Agency that Regent, and so Jardee, disputed the accuracy of the factual basis and the manner in which it had been arrived at when it applied for reconsideration of the Agency’s initial decision.
On the basis of Ms Gilbert’s evidence, I accept that Jardee made a conscious decision not to pursue the unfavourable review decision when it received it on or about 26 February, 2003. It did so for reasons that were associated with its best business interests. Having taken that decision, it proceeded to deal with the non-compliance identified in the Site Audit Report and gave a written undertaking to remedy it by May, 2003. On the evidence that I have been given, the Agency took Regent’s submissions into account in making the decisions but the content of the Site Audit Report remained unchanged. There was no amendment of the Site Audit Report. In many cases, this might be a matter that would not be worthy of comment. The Agency is not obliged to alter its Site Audit Report simply upon the say so of an approved provider or residential care service. In this case, though, it is a matter for comment and I will return to it a little later in these reasons.
The delegates of the Secretary relied on the Site Audit Report as part of the relevant material when they made their decisions regarding the issue of a Notice of Non-Compliance and Notice to Remedy Non-Compliance as well as the decision to refuse to grant extra service status. Review is not sought of either decision. It appears on the face of the correspondence and documents to which I have had access that it is the Site Audit Report that is in its original form as prepared on 2 January, 2003 that is in dispute. Initially, Jardee does not appear to have made the Department aware that it did not accept the factual basis set out in the Site Audit Report. This was consistent with its decision not to defer to Mr Knapp’s view that RAS did not want its future relationship with the Agency and Department undermined in any way.
It follows that between 26 or 27 February, 2003, when it received the Agency’s decision, and a date some time before 10 July, 2003, when Jardee’s solicitors wrote to the Department, neither Regent nor Jardee agitated their dissatisfaction with the Site Audit Report with either the Agency or the Department. Jardee did raise it, though, in July, 2003 when its solicitors wrote to the Department about the application for extra service status. By that time, it had discovered the version of the Site Audit Report posted on the Agency’s website and noted the differences of substance between it and the hard copy it had received dated 2 January, 2003.
It is not the Site Audit Report that is under review but the reviewable decision made on 25 February, 2003. Even so, it is the Site Audit Report that was one of the documents to which regard was had by the delegate of the Agency. The submissions made on behalf of Jardee and Regent were another. What was not one of the documents was the Site Audit Report as amended by the Agency after it had decided which of the submissions it would accept and which it would not. No indication was given to either Regent or Jardee at the time that either the decision or the reviewable decision was made that some of their submissions would be accepted and the Site Audit Report amended. I note that the Site Audit Report published on the Agency’s website purports to be dated 2 January, 2003 and to support the Agency’s accreditation decision dated 25 February, 2003. It has in fact been amended in substantive ways since that decision was made. Consequently, the factual basis upon which the reviewable decision was actually made is called into question. Was it indeed effectively the Site Audit Report as amended or was it not and the amended Site Audit Report only came later? Just how much later is open to speculation but it would also seem on the evidence that I have that the Agency entertained very few concerns about Regent for it had only one telephone audit on 27 March, 2003 and, although a site visit was later made on 18 August, 2003 after Jardee’s solicitors wrote to the Department, another had not been scheduled until December, 2003.
Fairness weighs in favour of Jardee’s being able to seek review of the Agency’s decision now that the Agency has placed the amended Site Audit Report on its website for all to see and not just those who, as were contemplated by s. 9.4 of the Accreditation Grant Principles, requested it. The publication of the amended Site Audit Report to support the reviewable decision calls into question the foundation upon which the decision was made. It is not the role of the Tribunal to engage in judicial review of a decision but it is the role of the Tribunal to engage in merits review of a decision. Merits review envisages that further evidence may be led beyond that available to the decision-maker at the time the decision was made and that the basis upon which a decision is supported in a merits review may change from that upon which it was made. Fairness, however, dictates that there should not be any suggestion that there is an attempt to change the basis upon which it was made. That is the suggestion that is implicit in the appearance of the amended Site Audit Report on the Agency’s website.
There is no evidence upon which I am satisfied that the Agency would be prejudiced by my allowing an extension of time. Given the extended periods between its site visits or even telephone audits, it appears to have no concerns about the operation of Regent. I am not satisfied that it would be placed in any position of difficulty in gathering its material. Certainly, 183 days had passed between the date of the decision and the application for an extension of time but not so much time has passed that the Agency would not be able to properly and fairly deal with the matter.
It was not appropriate to canvass the merits of any substantive application in detail. I am satisfied that Jardee has a case that, on its face, merits substantive consideration.
I accept that Jardee made what could be regarded as an initial business decision not to pursue its review rights. I also accept that it did not lodge its application for an extension of time within which to pursue those rights until approximately a month after RAS had told it that it was not proceeding with the purchase of Regent. That, however, is only one part of the context in which its decision was made. I have referred to the amended Site Audit Report above. Taking all of the matters into account, I consider that it would be fair and equitable to extend the time within which Jardee may lodge an application to review the Agency’s reviewable decision.
For the reasons I have given, I extend the time within which the applicant may lodge an application to review the reviewable decision of the respondent dated 25 February, 2003 to and including 24 September, 2003.
I certify that the sixty preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie
Signed: ...............................................................
R. Crook Associate
Date/s of Hearing 28 October, 2003
Date of Decision 11 May, 2004
Counsel for the Applicant Ms D. Mortimer
Solicitor for the Applicant Middletons Lawyers
Counsel for the Respondent Mr R. Niall
Solicitor for the Respondent Clayton Utz
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